THE TRAVEL CLUB CONCEPT REVENUE & LOYALTY FOR NON-TRAVEL BRANDS AND MEMBERSHIP-BASED ORGANIZATIONS

ANTICIPATEDGLOBAL ONLINETRAVEL SALES

BY 2021:

$855 BNThe travel industry is growing exponentially across the globe – travel represents one of the most lucrative opportunities for companies and organizations that want to increase brand affinity and are open to new revenue streams by offering ancillary products and services to their customers. By 2021, global online travel sales will reach $855 billion (according to eMarketer), a significant revenue opportunity for any brand to claim. This is truly a new era for global travel, and non-travel brands and organizations can play a significant role in travel sales and marketing.

Travel and lifestyle clubs help brands strengthen affinity and increase revenue – the value represented to the end member reflects favorably on the brand. Travel clubs also create ancillary revenue opportunities in unlikely places, such as employee groups, alumni clubs, credit unions and other organizations.

For years, non-travel retailers have been using airlines’ frequent flyer programs to add value to their core businesses and increase revenue, brand affinity and loyalty. Travel clubs similarly help non-travel companies and membership-based organizations achieve their goals for membership, affinity, customer retention and revenue – by branding integrated travel and lifestyle benefits to their company or organization, increasing engagement through an online platform, and ultimately, converting brand affinity into brand equity.

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DISCOVERING NEW POSSIBILITIES FOR TRAVEL & LIFESTYLE

Many of a brand’s customers or members are eager to travel in style and would respond enthusiastically to elite (and affordable) travel and lifestyle benefits offered through a convenient online travel club. According to Google/Phocuswright, 55% of leisure travelers take just 1-2 vacations a year and put a lot of thought into planning these trips, but when presented with a discount promotion, 30% would take a trip they were not planning and 25% would consider a destination they were not familiar with. 25% of American families have used a travel agent to plan a trip within the last 5 years, according to the 2017 US Family Travel Survey. When asked why, they said they liked having a one-stop shop for booking, and that they got “value for money” through the travel agent’s discounts and perks – all of these benefits could be made available through a travel club rather than a travel agency.

Travel and lifestyle clubs help members discover new possibilities for travel while providing members-only discounts not available to non-members. Oftentimes, the savings on one trip will more than offset the cost of a one-year membership. There are also long-term benefits for brands and organizations that combine a loyalty program with a travel club, allowing customers and members to accrue points on every booked trip and allowing brands and organizations to maximize their loyalty engagement throughout the customer lifecycle.

The challenge, however, is that non-travel companies and organizations generally lack the know-how, resources and budgets needed to build a travel club from scratch and manage vendor relations with travel suppliers and distributors. And yet, who knows more about their members – or has better contact with them – than the company or organization itself? That’s why travel clubs have been growing outside the travel industry: non-travel organizations can offer products and services they know their audiences will value within a club framework.

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30% OF LEISURE TRAVELERS

WOULD TAKE A TRIP THEY WEREN’T PLANNING

IF IT OFFERED A DISCOUNT

55% OF LEISURE TRAVELERS TAKE JUST

1-2 VACATIONS PER YEAR

A DISCOUNT PROMOTION WOULD PROMPT

25% OF LEISURE TRAVELERS TO CONSIDER AN

UNFAMILIAR LOCATION

THE CONNECTION BETWEEN TRAVEL AND LOYALTY

Because the travel industry serves such a large and diverse group of people, there are abundant opportunities for third parties to sell ancillary products and services to travelers. In fact, many retail innovations grew out of the travel industry. The original frequent-flyer program concept in the airline industry, for example, later helped retailers pioneer a broader loyalty program concept. Today, customers enrolled in a loyalty program represent 8% of website traffic but 41% of a company’s total revenue – proving that the loyalty concept works.

Like frequent flyer programs, the travel club concept is an idea that works because nearly everyone aspires to travel – they want to see, learn, taste, enjoy and experience. Leisure travelers in the U.S. spent $718 billion in 2017 and more consumers are mixing business and leisure trips. Despite these ready-made revenue opportunities, few companies or organizations outside the travel industry have the resources to build and maintain a travel club for their customers or members.

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IN 2017LEISURE TRAVELERS

SPENT

$718BCustomTravelSolutions.com | Industry Brief: The Travel Club Concept | May 2018 P3

WHY OFFER A TRAVEL CLUB?

In today’s “subscription economy” (think Netflix, Spotify, Birchbox) – where having a user base is the real financial capital – a membership-based organization’s best opportunity to add revenue and strengthen brand affinity is to offer exclusive online access to third-party products and services that their members value – and few things are as widely valued as travel and lifestyle benefits. Many non-travel organizations have never even considered a subscription travel club as a marketing strategy. By working with a partner that specializes in creating travel clubs – with established travel inventory supplier networks and a customizable UI platform – organizations can quickly and easily introduce the concept to their members or customers, immediately granting them access to comprehensive travel and lifestyle benefits. These can include members-only hotel rates, 24/7 travel agent assistance, vacation rental deals, wellness/fitness services and anything else members would expect from an elite travel and lifestyle club. One Instagram influencer known as “Millionaire Mentor” demonstrated the potential for affiliate marketing and similar online revenue programs: he amassed millions of subscribers and generated $7 million in retailer sales (in one year) simply by offering third-party products and services that fit his audience’s interests. Travel clubs represent a similar opportunity for membership-based organizations to become the go-to channel for all their members’ travel needs. The affinity that customers or members feel for a brand can carry over to the brand’s partners within the travel club. In most cases, non-travel organizations develop an interest in travel clubs because they want to bring in more revenue from membership fees. This is a strong motivation, but it’s also important to consider brand affinity – the travel club needs to adhere to brand standards and deliver real value to members, who have many options when it comes to trip planning. Travel clubs are meant to be unique, exclusive and beneficial; this is how they improve loyalty and differentiate an organization in the eyes of existing and potential members.

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BENEFITS OF OFFERING A TRAVEL CLUB

The travel club concept helps ensure a personalized experience for members throughout the travel planning process, with custom service to help individuals or groups achieve their travel preferences, goals and aspirations. This is the heart of the travel club concept – adding value to members’ lives within and beyond the organization and furthering the organization’s core mission through brand affinity.

By carrying out data-driven marketing activities based on a person’s needs, interest and behavior, brands have been shown to increase sales by 15-20%. Still, 60% of brands struggle to achieve this, which is why many are partnering with third-party companies and discovering new revenue opportunities. Travel clubs have near-universal appeal to any consumer who has ever aspired to travel, including budget-conscious Millennials, independent Boomers and flexible retirees. Tellingly, 70% of Millennials would rather spend money on memorable experiences like travel than on tangible items like clothes – and that trend is not going away.

By harnessing the inspirational and aspirational nature of elite travel and lifestyle benefits within a customizable, intuitive online platform, travel clubs can…

Offer members upgraded travel experiences that would be too expensive outside the club

Streamline the logistics of travel, such as obtaining visas or medication

Add revenue from increased membership fees

Add value to other benefits or rewards programs

Attract new customers/members through the appeal of elite travel and lifestyle benefits

Although non-travel organizations know their members better than travel marketers in general, they lack a turnkey travel club solution that could immediately bring in new revenue. More companies are outsourcing ancillary revenue programs (such as travel and lifestyle clubs) to technology companies with expertise and scale in a specific area, such as travel or loyalty – or both.

70%

OF MILLENNIALSWOULD RATHER SPENDMONEY ON MEMORABLE

EXPERIENCES LIKE TRAVELTHAN ON TANGIBLE ITEMS

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BANKING ON THE TRAVEL CLUB CONCEPT

The travel club concept sounds great on paper, but is it worth the investment and will it drive revenue, brand affinity and loyalty? The short answer is yes.

From a high-level perspective, offering an online travel club is a sound marketing strategy designed to reach a wide audience or membership base. Almost every consumer aspires to travel, and organizations can make that dream a reality by offering members an elite travel club subscription at an affordable price. From a bottom-line perspective, non-travel organizations are recognizing an immense need and an unconventional opportunity to become marketing partners with the fast-growing travel industry.

To take just one example, cruise operators can leverage the travel club concept to capture new revenue from cruise-adjacent travel purchases (airline, hotel). They can also use the club to keep passengers engaged with the brand before, during and after the cruise. On the other hand, non-travel organizations such as financial institutions often enjoy long-term relationships with key retail clientele, and a travel benefit/club offering would help deepen these relationships and open new revenue streams from recurring customers.

Many would argue that American Express and other card companies are really travel and lifestyle clubs at heart. Why would consumers pay hundreds of dollars in annual fees to use an Amex Platinum card, or thousands of dollars to use an Amex Centurion? The difference is in the benefits – each card offers certain elevated benefits (such as lounge access, or concierge services), and travelers will gladly pay a yearly subscription to access those benefits and be part of the brand. In the same way, travel clubs can add a sense of elite and exclusive value for members of any company or organization, while increasing revenue from membership fees, attracting new members and strengthening brand affinity across the board.

In short, the travel club concept presents a unique business case for any company or organization that wants to increase revenue and strengthen loyalty with their customers or members. This includes frequent flyer programs, shared interest clubs, banks and credit unions as well as retailers, network marketing companies, concierge/lifestyle programs, media publishers and more.

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ALMOST EVERY CONSUMER

ASPIRES TO TRAVEL,

AND ORGANIZATIONS CAN

MAKE THAT DREAM A REALITY

BY OFFERING A

SUBSCRIPTION-BASED ELITE TRAVEL CLUB.

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ABOUT CUSTOM TRAVEL SOLUTIONSCustom Travel Solutions is the world’s leading provider of elite membership-based travel and lifestyle benefits. Through its platform-as-a-service delivery model, Custom Travel Solutions enables companies and organizations to offer a vast array of high-value benefits at exclusive membership prices, generating new revenue and boosting brand loyalty. Custom Travel Solutions also provides travel benefit programs, white label booking engines, aggregated travel APIs, travel fulfillment, travel licensing, travel customer service, closed user group inventory and a full array of consultative services. In addition to its global client roster, Custom Travel Solutions is also a strategic partner of Amadeus, providing technical and fulfillment services to the leading international global distribution system (GDS).

By leveraging decades of industry experience and deep relationships throughout the travel ecosystem, Custom Travel Solutions has created a vast network of high-value

travel and lifestyle benefits at exclusive membership prices. Contact us today to schedule a demo of our platform and to learn how the “travel club” concept can drive revenue,

increase brand affinity and strengthen loyalty for your customers or members.

Contact us today to schedule a demo of our platform.sales@CustomTravelSolutions.com or +1.775.346.8711

START YOUR OWN TRAVEL CLUB WITH

CUSTOM TRAVEL SOLUTIONS

© Custom Travel Solutions 2018

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